<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
---------- ----------
COMMISSION FILE NUMBER 0-26496
CYBEX COMPUTER PRODUCTS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ALABAMA 63-0801728
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4912 RESEARCH DRIVE
HUNTSVILLE, ALABAMA 35805
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(205) 430-4000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED
ALL REPORTS TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH
SHORTER PERIOD THAT REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST
90 DAYS.
YES X NO
--- ---
AS OF NOVEMBER 11, 1996, 5,504,383 SHARES OF THE REGISTRANT'S COMMON STOCK
$.001 PAR VALUE, WERE OUTSTANDING.
<PAGE> 2
CYBEX COMPUTER PRODUCTS CORPORATION
FORM 10-Q
SEPTEMBER 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
March 31, 1996 and September 30, 1996 3
Condensed Consolidated Statements of Income
for the three and six months ended September
30, 1995 and 1996 4
Condensed Consolidated Statements of Cash Flows
for the six months ended September 30, 1995 and 1996. 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II - OTHER INFORMATION
Item 6. Exhibits 13
SIGNATURES 14
INDEX OF EXHIBITS 15
</TABLE>
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
CYBEX COMPUTER PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1996 1996
---------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................................................. $ 862,878 $ 3,596,615
Short-term investments................................................................. 36,907,899 28,562,204
Accounts receivable- trade, less allowance for doubtful accounts
of $131,383 and $165,406, respectively............................................... 4,276,640 5,347,347
Other receivables...................................................................... 15,103 116,329
Income tax receivable................................................................. 118,651 3,100
Inventories............................................................................ 3,487,043 3,155,026
Prepaid expenses....................................................................... 43,926 140,648
Deferred income taxes.................................................................. 393,639 393,639
----------- -----------
Total current assets................................................................ 46,105,779 41,314,908
Investments.............................................................................. --- 2,120,980
Property and equipment, net of accumulated depreciation ................................. 1,109,918 1,782,139
Other assets............................................................................. 202,065 194,386
----------- -----------
$47,417,762 $45,412,413
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable.......................................................................... $ 5,000,000 $ ---
Accounts payable....................................................................... 962,867 991,819
Accrued salaries and bonuses .......................................................... 515,726 535,414
Income taxes payable................................................................... --- 21,449
Liability for sales and warranty returns............................................... 200,000 244,000
Other current liabilities ............................................................... 33,124 210,339
----------- -----------
Total current liabilities........................................................... 6,711,717 2,003,021
Deferred income taxes.................................................................... 85,024 85,024
----------- -----------
Total liabilities................................................................... 6,796,741 2,088,045
Shareholders' equity:
Preferred stock, par value $.001 per share; 5,000,000 shares
authorized; no shares issued........................................................
Common stock, par value $.001 per share; 25,000,000 shares
authorized; March 31, and September 30, 1996 -- 6,068,008
shares issued, 5,504,383 shares outstanding.......................................... 6,069 6,069
Additional paid in capital............................................................. 34,079,719 34,079,719
Retained earnings...................................................................... 10,370,114 13,073,461
Treasury stock, at cost; 563,625 shares.............................................. (3,834,881) (3,834,881)
----------- -----------
Total shareholders' equity ......................................................... 40,621,021 43,324,368
----------- -----------
$47,417,762 $45,412,413
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
CYBEX COMPUTER PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1996 1995 1996
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales ........................................................ $6,000,889 $8,050,329 $11,654,349 $15,478,242
Cost of sales .................................................... 2,703,770 3,771,377 5,188,498 7,257,956
---------- ---------- ----------- -----------
Gross profit ................................................ 3,297,119 4,278,952 6,465,851 8,220,286
Selling, general and administrative expenses ..................... 1,513,820 1,936,797 2,971,746 3,812,591
Research and development expenses ................................ 390,086 501,896 751,826 1,024,382
---------- ---------- ----------- -----------
Operating income ............................................ 1,393,213 1,840,259 2,742,279 3,383,313
Interest income .................................................. 331,476 469,731 347,132 857,034
---------- ---------- ----------- -----------
Income before provision for income taxes ..................... 1,724,689 2,309,990 3,089,411 4,240,347
Provision for income taxes......................................... 572,566 837,000 1,065,621 1,537,000
---------- ---------- ----------- -----------
Net income .................................................. $1,152,123 $1,472,990 $ 2,023,790 $ 2,703,347
========== ========== =========== ===========
Net income per common and common
equivalent share ................................................ $ .22 $ .26 $ .45 $ .48
========== ========== =========== ===========
Weighted average common and common
equivalent shares outstanding ................................... 5,227,839 5,620,613 4,481,861 5,620,337
========== ========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE> 5
CYBEX COMPUTER PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
1995 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................................................................... $ 2,023,790 $ 2,703,347
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation ....................................................................................... 105,361 149,459
Amortization of discount on investments.............................................................. (140,852) (585,546)
Provision for losses on accounts receivable.......................................................... 95,911 34,023
Gain on sale of investments.......................................................................... --- (55,835)
Deferred income taxes................................................................................ (45,117) ---
Changes in operating assets and liabilities:
Accounts receivable................................................................................ (953,482) (1,104,730)
Inventories........................................................................................ (931,984) 332,017
Prepaid expenses, other receivables and other assets............................................... (279,359) (190,269)
Accounts payable ................................................................................. (265,479) 28,952
Accrued expenses and other liabilities ........................................................... 243,434 240,903
Income taxes payable /receivable................................................................... 48,238 137,000
------------ -----------
Net cash provided by (used in) operating activities................................................ (99,539) 1,689,321
Cash flows from investing activities:
Purchases of property and equipment................................................................... (224,219) (821,680)
Purchases of investments available for sale........................................................... (32,571,124) (33,197,752)
Proceeds from sale of investments..................................................................... --- 874,334
Proceeds from maturity of investments................................................................. 593,000 39,189,514
------------ -----------
Net cash provided by (used in) investing activities................................................... (32,202,343) 6,044,416
Cash flows from financing activities:
Borrowings from line of credit ...................................................................... 1,100,000 ---
Repayments of line of credit.......................................................................... (1,100,000) ---
Repayment of note payable............................................................................. --- (5,000,000)
Proceeds from initial public offering................................................................. 32,724,158 ---
Proceeds from issuance of common stock.................................................................. 533,000 ---
------------ -----------
Net cash provided by (used in) financing activities................................................... 33,257,158 (5,000,000)
------------ -----------
Net increase in cash and cash equivalents............................................................ 955,276 2,733,737
Cash and cash equivalents, beginning of period.......................................................... 202,817 862,878
------------ -----------
Cash and cash equivalents, end of period................................................................ $ 1,158,093 $ 3,596,615
============ ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest.............................................................. $ 1,975 $ 8,021
============ ===========
Cash paid during the period for income taxes.......................................................... $ 1,362,500 $ 1,400,000
============ ===========
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE> 6
CYBEX COMPUTER PRODUCTS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Cybex Computer Products Corporation (the Company) have been prepared by
management in accordance with generally accepted accounting principles for
interim financial information and in conjunction with the rules and regulations
of the Securities and Exchange Commission. In the opinion of management, all
adjustments necessary for a fair presentation of the interim condensed
consolidated financial statements have been included, and all adjustments are
of a normal and recurring nature. The condensed consolidated financial
statements as of and for the interim period ended September 30, 1996 should
be read in conjunction with the Company's consolidated financial statements as
of and for the year ended March 31, 1996 included in the Company's Form 10-K
filed June 27, 1996. Operating results for the three and six months ended
September 30, 1996 are not necessarily indicative of the results that may be
expected for the year ended March 31, 1997. The March 31, 1996 balance sheet
data presented herein was derived from audited financial statements but does
not include all disclosures required by generally accepted accounting
principles.
2. INVENTORIES
At March 31, 1996 and September 30, 1996, inventories consisted of the
following:
<TABLE>
<CAPTION>
March 31, September 30,
1996 1996
---------- ----------
<S> <C> <C>
Raw materials ........................................................ $2,035,335 $1,966,254
Work in process ...................................................... 903,883 645,671
Finished goods ....................................................... 547,825 543,101
---------- ----------
$3,487,043 $3,155,026
========== ==========
</TABLE>
3. EUROPEAN FACILITY
In June 1996, the Company announced that it selected Shannon, Ireland
for its European distribution and manufacturing facility. The Company has
reached an agreement in principle with The Shannon Development Authority for
facilities which will be located in the Shannon Free Trade Zone (SFTZ). The
definitive agreement is subject to final negotiations and execution. The
Shannon Facility should be operational during the Company's third quarter of
Fiscal year 1997.
In July, 1996, the Company signed an agreement to lease a 12,500 square
foot temporary facility in the SFTZ. The agreement is a month to month lease
for a maximum period of twelve months. The agreement is subject to the signing
of a long term lease for another facility located in the SFTZ. The
specifications and terms of the additional lease are subject to further
negotiation. The Company will vacate the temporary facility once the
replacement facility is available for occupancy.
6
<PAGE> 7
4. LINE OF CREDIT
The Company renegotiated its line of credit on July 2, 1996, to provide
borrowings of up to $2.5 million at the bank's prime rate. The line of credit
expires July 1, 1997. There were no borrowings outstanding under the
Company's line of credit as of March 31, 1996 and September 30, 1996.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto included in the Company's
Form 10-K for year ended March 31, 1996 filed on June 27, 1996.
GENERAL
The Company develops, produces and markets keyboard, video monitor and
mouse ("KVM") switch and extension products for use in the computer industry.
The Company's KVM switch products ("KVM Switch Products"), the first of which
was introduced in 1989, provide up to four users, each with a separate
keyboard, video monitor and mouse, with the capability to control up to 2,000
personal computers ("PCs"), thereby eliminating the need for individual
keyboards, video monitors or mice for the controlled PCs. Elimination of
separate keyboards, video monitors and mice can provide significant cost
reduction (lower initial investment and ongoing utility costs) and space
savings as well as more efficient technical support capabilities. The
Company's KVM Switch Products allow users to control IBM-compatible, Macintosh
and Sun computers functioning either as stand-alone systems or as file,
communications or print servers ("Servers") operating within a local area
network ("LAN"). The Company recently designed computer interfaces for its
Autoboot 4XP and 1XP which are designed to work with Hewlett Packard systems
with HP-HIL (Human Interface Link), including the 9000 and 3000 models; IBM's
RS/6000; DEC's Alpha; and Silicon Graphics Indigo Platforms. The Company's KVM
Switch Products are particularly useful in networking environments where
multiple computers are dedicated as Servers and in situations where multiple
computers need to be controlled from one location to facilitate network
management.
The Company's family of KVM extension products ("KVM Extension Products"),
the first of which was introduced in 1987, allow users to separate the
keyboard, video monitor and mouse up to 600 feet from the PC. In addition,
certain KVM Extension Products allow multiple users shared access to the same
PC from different keyboards, video monitors and mice. In addition, the KVM
Extension Products introduced in the third quarter of Fiscal 1996 utilize
standard category 5 UTP cabling which is the most common cable used in PC
networks, either installed or for planned installations. KVM Extension
Products are particularly useful in congested work areas or where working
conditions may be hazardous to the function of the computer.
The Company's net sales have increased in each fiscal year due primarily
to increases in the number of units sold to both new and existing customers.
These annual net sales increases reflect the Company's strategy of increasing
unit volume and market share through the introduction of new products and
through the introduction of increasingly enhanced generations of already
accepted products which have increased functionality and yet are price
competitive as compared to prior generations of the Company's products and to
the products of competitors. As a part of this strategy, the Company seeks to
be price competitive and to be the high quality provider of products in its
markets. This strategy has enabled the Company to sell succeeding generations
of products to existing customers as well as to increase its market share by
selling products to new customers as part of this strategy.
The Company contracts with third parties to provide completed
subassemblies of its products. The Company has recently begun a program of
outsourcing the entire product (turnkey) for certain stable high volume
products. The Company believes that outsourcing manufacturing generally enables
the Company to control product costs more effectively.
The Company continually evaluates new product opportunities and engages in
substantial research and product development efforts. The Company expenses all
product research and development costs as incurred. Additionally, the Company
also incurs substantial expenses related to advertising and participation in
trade shows.
Another important part of the Company's strategy is to emphasize customer
service and support. The Company offers a 30-day money back guarantee for all
of its products and a one year warranty on parts. To date the Company
8
<PAGE> 9
has not incurred significant sales and warranty returns expense. The Company
also offers sales discounts to its customers based on the level of sales to the
customers. Such discounts have historically not had a significant impact on the
Company's results of operations.
The Company believes that increasing its international sales will be an
important aspect of future revenue growth. International sales comprised 19.6%
of the Company's total sales for the six months ended September 30, 1996, and
20.4% and 15.4% of the Company's total sales in Fiscal 1996 and Fiscal 1995,
respectively. All international sales are made in US dollars.
RESULTS OF OPERATIONS
The following table presents selected financial information derived from
the Company's statements of income expressed as a percentage of net sales for
the fiscal years indicated:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
---------------------- ------------------------
1995 1996 1995 1996
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales ..................................... 100.0% 100.0% 100.0% 100.0%
Cost of sales ................................. 45.1 46.8 44.5 46.9
---------- ---------- ----------- -----------
Gross profit .................................. 54.9 53.2 55.5 53.1
Research and development expenses ............. 6.5 6.2 6.5 6.6
Selling, general and administrative expenses .. 25.2 24.1 25.5 24.6
---------- ---------- ----------- -----------
Operating income .............................. 23.2 22.9 23.5 21.9
Interest income ............................... 5.5 5.8 3.0 5.5
---------- ---------- ----------- -----------
Income before income taxes .................... 28.7 28.7 26.5 27.4
Provision for income taxes .................... 9.5 10.4 9.1 9.9
---------- ---------- ----------- -----------
Net income .................................... 19.2% 18.3% 17.4% 17.5%
========== ========== =========== ===========
</TABLE>
Three Months Ended September 30, 1996 Compared to the Three Months Ended
September 30, 1995
Net sales increased 34.2% to $8.1 million in the three months ended
September 30, 1996 from $6.0 million in the three months ended September 30,
1995. The increased sales resulted from increased sales volume to existing
customers and from an increase in sales volume to new customers of the
Company's KVM Switch Products. Sales of KVM Switch Products increased 40.5% to
$6.6 million in the three months ended September 30, 1996 from $4.7 million in
the three months ended September 30, 1995.
Sales of KVM Extension Products increased 17.5% to $1.2 million in the
three months ended September 30, 1996 from $1.0 million in the three months
ended September 30, 1995. The increased sales volume resulted primarily from
sales of the new Keyview, SNAP and Power Control Products, which had no sales
during the second quarter of Fiscal 1996.
As a percentage of net sales, the Company's KVM Switch Products increased
to 82.4% from 78.7% and KVM Extension Products declined to 15.3% from 17.4%
during the same period in fiscal 1996. Management anticipates that sales of
KVM Extension Products will continue to be a substantial portion of the
Company's net sales. International sales increased 17.2% to $1.3 million
(17.0% of net sales) in the three months ended September 30, 1996 from $1.1
million in the three months ended September 30, 1995.
Gross profit increased 29.8% to $4.3 million in the three months ended
September 30, 1996, from $3.3 million in the three months ended September 30,
1995. Gross profit as a percentage of net sales declined to 53.2% from 54.9%
during the same period. This decrease reflects an overall increased sales
volume of newer KVM Switch Products, which yield overall lower margins than the
more mature products.
9
<PAGE> 10
Selling, general and administrative expenses increased 27.9% to $1.9
million (24.1% of net sales) in the three months ended September 30, 1996, from
$1.5 million (25.2% of net sales) in the three months ended September 30, 1995.
This increase reflects the increased level of expenditures in administration,
sales, customer support, channel development, and marketing activities required
to support the Company's expanded sales base. Management anticipates that the
dollar amount of selling, general and administrative expenses will continue to
increase, however, the anticipated expanding sales volume should cause these
expenses to remain relatively constant.
Research and development expense was $0.5 million or 6.2% of net sales in
the three months ended September 30, 1996, as compared to $0.4 million or 6.5%
of net sales in the three months ended September 30, 1995. Management
anticipates that the dollar amount of research and development expenses will
increase but will remain relatively constant as a percentage of net sales.
As a result of the factors discussed above, operating income increased
32.1% to $1.8 million or 22.9% of net sales for the three months ended
September 30, 1996, as compared to $1.4 million or 23.2% of net sales for the
three months ended September 30, 1995.
Interest income increased to $470,000 or 5.8% of net sales in the three
months ended September 30, 1996 from $331,000 or 5.5% of net sales in the three
months ended September 30, 1995. This increase is related primarily to
interest income from the investment of the proceeds from the initial public
offering completed July 27, 1995.
Net income increased 27.9% to $1.5 million or 18.3% of net sales in the
three months ended September 30, 1996, from $1.2 million or 19.2% of net sales
in the three months ended September 30, 1995, as a result of the factors
discussed above.
Six Months Ended September 30, 1996 Compared to the Six Months Ended September
30, 1995.
Net sales increased 32.8% to $15.5 million for the six months ended
September 30, 1996. The increase in net sales was due to increased sales of
the Company's KVM Switch and KVM Extension Products. Sales of KVM Switch
Products increased 51.4% to $12.6 million in the six months ended September 30,
1996 from $9.1 million in the six months ended September 30, 1995. Sales of
KVM Extension Products increased 18.5% to $2.5 million in the six months ended
September 30, 1996 from $2.1 million in the six months ended September 30, 1995
primarily due to sales of Keyview, SNAP, and Power Control Products which had
no sales during the six months ended September 30, 1995. As a percentage of
net sales, the Company's KVM Switch Products increased to 81.4% from 78.0% and
KVM Extension Products declined to 16.0% from 17.9% during the same period.
International sales increased 43.0% to $3.0 million or 19.6% of net sales in
the six months ended September 30, 1996 as compared to $2.1 million or 18.8% of
net sales in the six months ended September 30, 1995.
Gross profit increased 27.1% to $8.2 million in the six months ended
September 30, 1996 from $6.5 million in the six months ended September 30,
1995. Gross profit as a percent of net sales decreased to 53.1% from 55.5%
during the same period. This decrease reflects an increase in sales of newer
KVM Switch Products, which yield an overall lower margin than our more mature
products.
Selling, general and administrative expenses increased 28.3% to $3.8
million or 24.6% of net sales in the six months ended September 30, 1996 from
$3.0 million or 25.5% of net sales in the six months ended September 30, 1995.
This increase in dollars spent reflects the increased level of expenditures in
administration, sales, customer support, channel development, and marketing
activities required to support the Company's expanded sales base.
Research and development expense was $1.0 million or 6.6% of net sales in
the six months ended September 30, 1996, as compared to $0.7 million or 6.5%
of net sales for the six months ended September 30, 1995. Management
anticipates that the dollar amount of research and development expenses will
increase but will remain relatively constant as a percentage of net sales.
10
<PAGE> 11
As a result of the factors discussed above, operating income increased
23.4% to $3.4 million or 21.9% of net sales for the six months ended September
30, 1996 as compared to $2.8 million or 23.5% of net sales for the six months
ended September 30, 1995.
Interest income increased to $857,000 or 5.5% of net sales in the six
months ended September 30, 1996 from $347,000 or 3.0% of net sales in the six
months ended September 30, 1995. This increase is related primarily to
interest income from the investment of the proceeds from the initial public
offering completed July 27, 1995.
Net income increased 33.6% to $2.7 million or 17.5% of net sales for the
six months ended September 30, 1996 from $2.0 million or 17.4% of net sales for
the six months ended September 30, 1995 due to the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
Prior to its initial public offering in July 1995, the Company financed
its operations primarily through cash flow from operations, supplemented with
borrowings under its line of credit as needed. As of September 30, 1996, the
Company had an available line of credit of $2.5 million with no outstanding
borrowings. The Company renegotiated an increase in the line of credit in
July, 1996, from $1.85 million at the bank's prime rate.
The Company's working capital position improved from $39,394,062 as of
March 31, 1996 to $41,432,867 as of September 30, 1996 (adjusted to include
$2,120,980 of long term-investments). This improvement in the Company's
working capital position was due primarily to increased earnings during the
six months ended September 30, 1996.
Cash from operating activities increased from approximately ($100,000)
for the six months ended September 30, 1995 to $1.7 million for the six months
ended September 30, 1996. This increase was caused primarily by an increase
in net income, and by the change in inventory from a substantial increase for
the six months ended September 30, 1995, to a substantial decrease in
inventory for the six months ended September 30, 1996. The reduction in
inventory was attributed primarily to increased sales levels depleting
inventory combined with an increase in the level of turnkey products, which
reduced the level of raw components needed for production.
There were capital expenditures totaling $0.8 million in the first six
months of Fiscal 1997. The Company purchased over 14 acres of land for
approximately $600,000. The remaining expenditures were used to purchase
equipment for the Company.
In July, 1996, the Company signed an agreement to lease a 12,500 square
foot facility in the Shannon Free Trade Zone (SFTZ) in Ireland. The agreement
is a month to month lease for a maximum period of twelve months. The agreement
is subject to the signing of a long term lease for additional facilities
located in the SFTZ. The specifications and terms of the additional lease are
subject to further negotiation. The Company will vacate the temporary facility
once the additional facilities are available for occupancy.
The Company believes that its current financial position and existing cash
and investments along with earnings and amounts available under its line of
credit will be sufficient to meet the Company's cash requirements over the next
twelve months.
FINANCIAL ACCOUNTING DEVELOPMENTS
In 1995, Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of" (SFAS 121) was issued. SFAS 121 requires that long-lived assets
and certain identifiable intangibles held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
11
<PAGE> 12
SFAS 121 is effective for fiscal years beginning after December 15, 1995. The
Company believes that the adoption of SFAS 121 will not have a material effect
on the Company's financial position or results of operations.
In 1995, Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" (SFAS 123) was issued. SFAS 123 requires the
Company to either account for the estimated fair value of stock options granted
as compensation expense or continue to account for them under the present
rules. If the Company chooses to continue to account for stock options granted
under present rules, as the Company believes is likely, disclosure will be
required of the compensation expense. SFAS 123 is effective for fiscal years
beginning after December 15, 1995. The Company believes that the adoption of
SFAS 123 will not have a material effect on the Company's financial position or
results of operations.
FORWARD LOOKING STATEMENTS
When used in this Form 10-Q, the words "believe," "anticipate," "think,"
"intend," "will be," and similar expressions identify forward looking
statements. Such statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward looking
statements which speak only as of the date hereof. Readers are also urged to
carefully review and consider the various disclosures made by the Company which
attempt to advise interested parties of the factors which affect the Company's
business, including the disclosures made in other periodic reports on Forms
10-K, 10-Q and 8-K filed with the Securities and Exchange Commission.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits
(a) The following exhibit is being filed with this report:
Exhibit No. Description
----------- -----------
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule (For SEC use only)
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CYBEX COMPUTER PRODUCTS CORPORATION
/s/ Doyle C. Weeks
--------------------------------------
Doyle C. Weeks
Senior Vice President - Finance and
Chief Financial Officer and Treasurer
Date: November 11, 1996
14
<PAGE> 15
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
<S> <C> <C>
11 Statement Regarding Computation of Per Share Earnings 16
27 Financial Data Schedule (For SEC use only)
</TABLE>
15
<PAGE> 1
EXHIBIT 11
CYBEX COMPUTER PRODUCTS CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1996 1995 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding 4,958,447 5,504,383 4,065,034 5,504,383
Net weighted average common stock options
outstanding under the treasury stock method 269,392 116,230 416,827 115,954
---------- ---------- ---------- ----------
Weighted average common and common
equivalent shares outstanding 5,227,839 5,620,613 4,481,861 5,620,337
========== ========== ========== ==========
Net income $1,152,213 $1,472,990 $2,023,790 $2,703,347
========== ========== ========== ==========
Net income per common and common
equivalent share $ .22 $ .26 $ .45 $ .48
========== ========== ========== ==========
</TABLE>
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 3,596,615
<SECURITIES> 30,683,184
<RECEIVABLES> 5,512,753
<ALLOWANCES> 165,406
<INVENTORY> 3,155,026
<CURRENT-ASSETS> 41,314,908
<PP&E> 2,461,183
<DEPRECIATION> 679,044
<TOTAL-ASSETS> 45,412,413
<CURRENT-LIABILITIES> 2,003,021
<BONDS> 0
0
0
<COMMON> 6,069
<OTHER-SE> 47,153,180
<TOTAL-LIABILITY-AND-EQUITY> 45,412,413
<SALES> 15,478,242
<TOTAL-REVENUES> 15,478,242
<CGS> 7,257,956
<TOTAL-COSTS> 7,257,956
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 34,023
<INTEREST-EXPENSE> 3,500
<INCOME-PRETAX> 4,240,347
<INCOME-TAX> 1,537,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,703,347
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
</TABLE>
